Guy Who 'Hates To Be A Curmudgeon' Explains Why Yahoo Buying A 17-Year-Old's Startup For $30 Million Makes No Sense
Apr 24, 2020, 08:11 IST
When a startup sells for multiple millions, other founders are left reeling.
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"Why him, not me?" they wonder.Advertisement
One Y Combinator founder, Origami's Vibhu Norby, vented publicly about this in a post that rose to the top of Hacker News over night. His article, "The Summly deal makes no sense" details Yahoo's acquisition of 17-year-old Nick D'Aloisio's startup for $30 million.
"I hate to be a curmudgeon, but I think Yahoo shareholders deserve an explanation," he wrote. "It's not clear at all to me that they are getting their money's worth."
He makes some valid points.
- Summly doesn't make any money
- Summly doesn't have one million users
- Only two of its five employees passed a Yahoo technical/CS screening test.
- Yahoo doesn't plan to use Summly. It plans to shut down the app. So it really spent all that money to acquire a teenager and a colleague or two.
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We're not sure either. Here's our best guess into Yahoo's thought process.
- D'Aloisio is a hustler. His investor list includes Airbnb CEO Brian Chesky, Zynga CEO Mark Pincus, Lady Gaga's manager Troy Carter, Automattic's Matt Mullenweg, Ashton Kutcher, Wendy Murdoch, and Yoko Ono.
- It's possible that, in addition to wanting D'Aloisio's hustle and teenage, One Direction-y good looks for a marketing spokesperson position, Yahoo wanted to make all those big names in California happy.
- Yahoo also knew acquiring a 17-year-old's startup would get a lot of press.
- Marissa Mayer has spoken publicly about her acquisition strategies, and Summly fits the bill. It's a mobile app, and Mayer is looking to onboard mobile talent. It was also a relatively cheap acquisition.